What does NAFTA stand for?

The correct answer is the North American Free Trade Agreement. This significant trade deal was established to promote economic cooperation and enhance trade between the United States, Canada, and Mexico. By eliminating tariffs and trade barriers, NAFTA aimed to facilitate a smoother flow of goods and services among these three countries, thereby fostering economic growth and increasing competitiveness in the region.

Understanding the purpose and impact of NAFTA is crucial for students of international business, as it exemplifies how regional trade agreements can influence global trade dynamics and economic relationships between participating countries. Over the years, NAFTA played a central role in shaping the trading landscape in North America until it was replaced by the United States-Mexico-Canada Agreement (USMCA) in 2020.

The other options do not accurately describe the agreement or its objectives, which is why they do not represent the correct definition of NAFTA.